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The U.S. government has agreed to take no near-term legal action against 40,000 former students of the bankrupt Corinthian Colleges Inc who have defaulted on federal loans, according to a lawyer representing students.

Corinthian abruptly closed its remaining 28 schools in April and left 16,000 students without classes, becoming the largest failure in for-profit higher education. The company operated more than 120 campuses at its peak.

The company filed for bankruptcy in May and soon after the U.S. Department of Education announced a plan under which tens of thousands of former Corinthian students could seek relief from their federal student loans. However, a lawyer for the government told a court hearing on June 30 that fewer than 5,000 students had applied.